As treaties and trade agreements are implemented this year, more U.S. companies are looking at the Association of Southeast Asian Nations for fresh business opportunities. Fortunately, a whole host of logistics and transportation service providers are laying the groundwork to overcome inherent infrastructure challenges.

Today, U.S. trucking companies face more regulations than any time in history—and they claim this “regulatory tsunami” is putting the clamp on U.S. productivity. During this session shippers will gain a better understanding of the current state of trucking regulations (HOS & CSA) and the impact they're having on capacity and rates.

Despite recording a quarterly loss, less-than-truckload (LTL) transportation services provider YRC Worldwide (YRCW) made some inroads in revenues and tonnage on both an annual and sequential basis for the third quarter.

For the quarter, YRCW’s net loss of $62 million and $1.33 per share was an improvement compared to the third quarter of 2009, when the company reported a $159 million net loss and a $66.66 loss per share. Operational revenue at roughly $1.14 billion was down 5.6 percent year-over-year, and total operating expenses, and the company took a quarterly operating income loss of $18.9 million compared to $126.7 million in the third quarter of 2009. Quarterly operating expenses were down 13 percent.

“We are gratified by the significant momentum in the third quarter operating performance, driven by our key initiatives of disciplined pricing, customer mix management and cost improvements,” said YRCW Chairman, President, and CEO Bill Zollars on an earnings conference call earlier today.

Zollars added that YRCW is making significant progress on its comprehensive recovery plan, which was announced in late September. A major component of the recovery plan is the company’s recent vote by its Teamster members to ratify its existing labor contract.

Third quarter shipments per day at YRC National Transportation were down 12.2 percent year-over-year and up 1.6 percent compared to the second quarter. Revenue per shipment and revenue per hundredweight were up 2.8 percent and 1.9 percent, respectively, year-over-year. And YRC National revenue per hundredweight and revenue per shipment were up 0.3 percent and down 0.1 percent, respectively, compared to the second quarter. Tonnage per day for YRC National was up 13.0 percent year-over-year and 1.2 percent compared to the second quarter.

At YRC Regional Transportation, third quarter shipments per day were up 2.5 percent year-over-year and up 1.8 percent compared to the second quarter. YRC Regional revenue per hundredweight and revenue per shipment were down 2.5 percent and up 3.7 percent, respectively, compared to the second quarter. Tonnage per day for YRC Regional was up 8.9 percent year-over-year and 2.1 percent compared to the second quarter.

“The general economic outlook reflects modest growth prospects for the balance of this year and into 2011 while LTL industry dynamics continue to improve,” said Zollars. “We have seen industry volumes increases and absorb the excess capacity in the industry and pricing continues to be more disciplined compared to last year’s trend. Pricing remains competitive but we are seeing it tighten. Our contractual increases now stand about 3.5 percent ahead of last year, and the results of our focused efforts on customer mix management have generated positive results.”

Even though YRCW has recorded losses in excess of $2 billion over the last 11 quarters, Zollars said the company has had four consecutive quarters of year-over-year improvement and six straight quarters of sequential improvement, following the integration of its Yellow and Roadway units in March 2009. He added that YRCW recorded positive EBITDA for the second straight quarter in the third quarter and positive operating cash flow for the third quarter.

While YRCW did show some signs of improvement in the third quarter, a Wall Street analyst noted the company has more ground to cover to get back to profitability.

YRCW’s recent results showed necessary operating performance and stabilizing cash burn rates, both crucial trends to ensure near-term survival,” wrote Jon Langenfeld, transportation analyst at Robert W. Baird & Company. “Additionally, industry demand has improved and industry yields have stabilized. However, YRCW still faces meaningful challenges. Though industry volumes have firmed and YRC Regional’s volume growth has resumed, the company continues to lose market share on an overall basis given YRC National’s continued volume contraction. Further, as early as 2011, the company will face deferred costs returning to its model, which will limit profitability in the intermediate term.”

About the Author

Jeff BermanGroup News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

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